7 ms·

The relief policy has been terribly irresponsible: * Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacati

The relief policy has been terribly irresponsible: * Those who sacrificed and paid off their student debt receive no reward. Those who put 10k in ink or vacations on the books get a 10K payday. * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not * The policy smacks of "vote us back in or else 10K wont be yours" In general I am strongly against policies which change the rules on and penalize people who sacrificed to better their life and better those who made relatively worse choices (or choices with known tradeoffs, but then the tradeoffs get mitigated at the expense of those who did something more taxing for a reward). You can tax the wealth out of those who chose to better their income, but you cannot tax the experiences (eg:travel) out of those who dissipated their resources today/in the past. For example, bad news for those who never had a dream to be a Mech Eng, but did it anyways for the good of their family. As a general observation being in America the past ~10 yrs I find America has a major problem with policies that pattern match this kind of subsidize the negative side of choices with tradeoffs to the detriment of someone else who made a sacrifice to receive a reward.

deleted 4y ago
[deleted]
vsareto 4y ago
This loan forgiveness wouldn't have needed to happen if schools had not raised tuition by insane amounts.
- maerF0x0 4y ago
  schools wouldn't have been able to raise tuition by insane amounts if the gov't hadn't underwrote all those loans' risk
  - vsareto 4y ago
    Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.
    - _-david-_ 4y ago
      Yes universities took advantage, but it seems clear that the government is who is to blame. They created a situation where a person who is going to be making $40,000 a year could take out massive student loans. It is hard to put as much blame as you are on an organization who has the opportunity to get government money.
      - vsareto 4y ago
        Universities could have said "yes, you can take out 40k in loans, but with our low tuition, you won't need to"
        black6 4y ago
        That would be leaving cash on the table.
        vsareto 4y ago
        There were consequences for taking that cash, as we see today with the need for loan forgiveness. If universities had kept tuition low, you might still have had government backed loans, but would not have needed loan forgiveness. I don't see how people can simultaneously be against government-backed loans existing, but also wanting universities to take as much from that system as possible to the detriment of society.
        _-david-_ 4y ago
        >but also wanting universities to take as much from that system as possible to the detriment of society. I don't think anybody is saying universities should take as much as possible, only that it is to be expected. Because it is expected the government should not be enabling it. People have been asking the government to stop with these loans since the beginning saying this exact thing would happen.
    - fallingknife 4y ago
- kodyo 4y ago
  Schools take free government money to produce the right kind of voters. The wrong kind of voters get to pay for it. Win-win.
ModernMech 4y ago
> * Those who sacrificed and paid off their student debt receive no reward. Everyone is sacrificing. This statement seems to imply that people who haven't paid of their debt only haven't done so because they haven't sacrificed anything and are instead taking vacations. Moreover, the general concept of taxes is that you put money into a government pot, and it goes to things that maybe won't better you in a direct way. I've paid much more than $20k in taxes, why can't I get something out of that which will benefit me directly for once, even if it doesn't benefit someone else directly? My sacrifice is that I don't have kids, and yet I'm paying for the schooling of other people's kids. That's not something I complain about because I know it will help society as a whole. > * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not The whole point of the policy is that people aren't paying off that loan one way or another. It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy. > * The policy smacks of "vote us back in or else 10K wont be yours" It's the other way around: the policy is the fulfilment of a campaign promise from the last election; student loan debt relief was one of the things Biden campaigned on. Last time we elected a billionaire real-estate developer and got tax breaks for the rich and corporations. This time we voted the other way and are getting student loan debt relief. That's just the way it works. Anyway, Biden isn't up for reelection this year and is implementing this action through the executive branch, so control of Congress doesn't matter so much as to whether this policy is implemented or not.
- ipaddr 4y ago
  It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy. That is exactly what is happening. Sitting around could be defined as parents with $10,000 ready to help but deciding to let general tax payers pay up.
  - ModernMech 4y ago
    If that were the case, there wouldn't be such a clamoring for debt relief. Fact is that student loan calculations already take into account the assets of parents. Schools routinely factor in the help they could give into the total cost, and offer a package of grants and loans to make up the difference. If parents are withholding support it likely means the student can't meet tuition with their aid package.
SnooSux 4y ago
I'm not disagreeing with any of your points, the 10k forgiveness policy is strictly a way to appeal to young voters. But you clearly didn't read the article. The article is about changes to the income-based repayment program, which was a big change that was part of the same bill. And frankly it doesn't get enough attention for how much of a long-term impact that it'll have on future borrowers, as opposed to the (tentatively) one-time forgiveness that affects mostly college graduates.
- jgwil2 4y ago
  Small nitpick: this is all executive action, not a bill or law. That means that it can be undone as soon as a new president takes office.
  - caseysoftware 4y ago
    That's not a "small nitpick" but a huge glaring gap in this entire process. Not only can it be undone but it can be re-done or changed in any way imaginable short of a court stepping in and saying "no, you don't have the authority to do that" which is unlikely. We should get VERY nervous when POTUS enacts sweeping changes to "rewrite" laws without actually changing the law.
    - deleted 4y ago
      [deleted]
Eddy_Viscosity2 4y ago
Bring back the ability to declare bankruptcy for student loans and then market can better price risk. The only stipulation I would think might be good is a waiting period of say 10 or 15 years. This would to prevent say a new dentist or lawyer student from immediately declaring bankruptcy after graduation. By 10-15years on, if the person can't afford student loan payments, then bankruptcy should be on the table.
- chrsig 4y ago
  I fully agree with this. I'd add fixing interest on it. Variable interest rates just shouldn't exist.
- troyvit 4y ago
  Why should a college education take 10-15 years to pay off though?
  - Eddy_Viscosity2 4y ago
    It wouldn't if you get a good paying job. But sometimes the degree doesn't pay out that way and people are left struggling to pay rent, let alone debt.
  - skellington 4y ago
    Sure. Why should anything cost anything? Why should anyone have to subsidize people getting useless degrees at expensive colleges? Why can't you go to CCs and then state schools for much less? For most people, the modern college experience is just extended high school with almost zero educational value. Most people are more suited to trade schools. The poor kids already have incredible access to scholarships. It's all just "I want it" thinking.
    - Turing_Machine 4y ago
      You'd probably be surprised at how many of the student loans in default came from trade schools. I know the narrative is that all the people in student loan trouble majored in Bulgarian folk singing or whatever, but that's not anything like an accurate picture. The largest outright student loan cancellation in recent years was for former students of ITT Tech, which was a trade school.
hashmap 4y ago
This is bucket-crab talk. Not getting a reward is not the same as getting penalized; those who paid everything off have an unchanged situation. You might say the action doesn't go far enough and should lift up more people, and there is an argument for that. This, however, just smacks of "the train ran over me, so it's disrespectful if it doesnt also run over everyone else."
- Ekaros 4y ago
  Money does not magically appear from nowhere...
  - hashmap 4y ago
    It is debt that does disappear if it is forgiven.
    - Ekaros 4y ago
      Debt is money...
      - hashmap 4y ago
        That disappears when forgiven, exactly.
        s1artibartfast 4y ago
        If you loan me 10k, and then later forgive the loan, you are still 10k in the hole. I spent the 10k on goods and services, and you have 10k less that you can spend. Alternatively, can I borrow $10k from you?
- s1artibartfast 4y ago
  It isn't crab bucket mentality if you have to pay to lift others up.
  - 4y ago
falcolas 4y ago
> Those who sacrificed and paid off their student debt receive no reward "I suffered, so everyone else should suffer the same way I did!" Seriously, this is such a self centered and short sighted point of view; it's the "back in my day people worked hard and gave their loyalty to their company" mantra of the previous generation being recycled. It's not a reward, it's a relief for predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job" into their ears day after day. If your knee jerk reaction is to feel sorry for yourself, or mad at them, perhaps you should take a step back and instead be happy for them, that they are not being shoved through the same pain you were (a pain which is is being amplified by the rise in the cost of living and stagnated wages). We should be lifting people up; not saying "grab your bootstraps and pull."
- viggity 4y ago
  It's not "I suffered". It is "I sacrificed"
  - falcolas 4y ago
    Your $10,000 sacrifice also probably paid off more of the student loan than the $10,000 subsidy did. Education costs have risen. 33% on average over the last 10 years. 100% in the last 20. And that is accounting for inflation.
    - maerF0x0 4y ago
      People are discussing same graduation year, same school, same loan scenarios here. It's more about someone who forgoes something so that they pay off the loan, vs someone who does not forgo said thing, but ends up getting both (the loan and the thing). Eg: imagine one has an extra $1000 today and 10k of student loan. Could make 10 fun choices at $1000 each or I could pay off my student loan. If I choose to take the fun, I get both the fun and the load paid off. If I do the former, I do not get the fun. It actually becomes more exacerbated if someone did something with a net profit such as putting $10k down on a house for example. Now they have the equity in the asset _and_ the debt forgiveness. Whereas the person who paid off the loan themselves does not have the equity.
_-david-_ 4y ago
You are missing the worst part. There is no policy to actually fix the problem. Just paying off some debt now won't stop the next generation from taking out the same loans.
- s1artibartfast 4y ago
  The worst part is the link states that the new policy is to always do this in the future. Eg, no loan repayment for music majors and full repayment for engineers.
brightball 4y ago
The fact that the debate has remained on this topic is exactly the political division desired. It’s correct that the relief will do nothing to solve the overall problem. It’s also correct that it’s an unabashed vote buying scam that probably shouldn’t even be legal. But it’s also correct that the student loan structure is truly predatory. This entire conversation needs to shift from paid relief to “0% interest student loans” or fixed interest (borrow 100k and you will pay back 130k) and/or a pre-income tax option to pay back loans faster akin to a 401k. The way that interest builds on deferrals for these unforgivable loans is truly nuts based on the people I’ve talked to. Unless there’s a permanent way to do that, it’s all political theater.
- labcomputer 4y ago
  I'm not sure 0% interest really helps when (prospective) students still have the ability to borrow an unlimited amount of dollars. The current crisis is caused by colleges raising tuition to maximum amount that students are able to pay, which is essentially only limited by how much they are allowed borrow. What I would like to see is: 1. Federal student loans capped at $XX,000 per semester, disbursed directly to school. 2. If the school accepts federal loans for any student, then tuition and fees are capped for all students at $YY,000 per semester (where YY is a small multiplier on XX, maybe 1.25). 3. Interest capped at a "reasonable" amount. This might mean simple (non-compounding) interest, or non-accrual of interest while loans are deferred, or something else. 4. Private loans should be dischargeable in bankruptcy after 10 to 15 years.
  - brightball 4y ago
    Fair points all around.
fallingknife 4y ago
And even if I supported the debt forgiveness, I would still think it's crazy that the president can just unilaterally spend $500 billion like that without any checks and balances.
- rr888 4y ago
  Esp when inflation is a problem. What should we do? Howabout hand out half a trillion.
godelski 4y ago
Don't forget that you also don't get forgiveness if you took out private loans instead of federal loans. This topic seems to be missed a lot.

deleted 4y ago

[deleted]

vsareto 4y ago

This loan forgiveness wouldn't have needed to happen if schools had not raised tuition by insane amounts.

maerF0x0 4y ago
schools wouldn't have been able to raise tuition by insane amounts if the gov't hadn't underwrote all those loans' risk
- vsareto 4y ago
  Nah, that was an opportunity that universities saw to make more money and they took it without thinking of the larger consequences (which is where we are today having to do loan forgiveness). Nothing about government underwriting forced schools to charge higher tuition. They chose self-enrichment (not even profit to shareholders except for scam schools) over easier access to education and a more educated population. Universities should not be behaving like capitalists.
  - _-david-_ 4y ago
    Yes universities took advantage, but it seems clear that the government is who is to blame. They created a situation where a person who is going to be making $40,000 a year could take out massive student loans. It is hard to put as much blame as you are on an organization who has the opportunity to get government money.
    - vsareto 4y ago
      Universities could have said "yes, you can take out 40k in loans, but with our low tuition, you won't need to"
      - black6 4y ago
        That would be leaving cash on the table.
        vsareto 4y ago
        There were consequences for taking that cash, as we see today with the need for loan forgiveness. If universities had kept tuition low, you might still have had government backed loans, but would not have needed loan forgiveness. I don't see how people can simultaneously be against government-backed loans existing, but also wanting universities to take as much from that system as possible to the detriment of society.
        _-david-_ 4y ago
        >but also wanting universities to take as much from that system as possible to the detriment of society. I don't think anybody is saying universities should take as much as possible, only that it is to be expected. Because it is expected the government should not be enabling it. People have been asking the government to stop with these loans since the beginning saying this exact thing would happen.
  - fallingknife 4y ago
kodyo 4y ago
Schools take free government money to produce the right kind of voters. The wrong kind of voters get to pay for it. Win-win.

ModernMech 4y ago

> * Those who sacrificed and paid off their student debt receive no reward. Everyone is sacrificing. This statement seems to imply that people who haven't paid of their debt only haven't done so because they haven't sacrificed anything and are instead taking vacations. Moreover, the general concept of taxes is that you put money into a government pot, and it goes to things that maybe won't better you in a direct way. I've paid much more than $20k in taxes, why can't I get something out of that which will benefit me directly for once, even if it doesn't benefit someone else directly? My sacrifice is that I don't have kids, and yet I'm paying for the schooling of other people's kids. That's not something I complain about because I know it will help society as a whole. > * People are now incentivized to not pay off the last 10K of their debt until there is an answer if relief will be enacted or not The whole point of the policy is that people aren't paying off that loan one way or another. It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy. > * The policy smacks of "vote us back in or else 10K wont be yours" It's the other way around: the policy is the fulfilment of a campaign promise from the last election; student loan debt relief was one of the things Biden campaigned on. Last time we elected a billionaire real-estate developer and got tax breaks for the rich and corporations. This time we voted the other way and are getting student loan debt relief. That's just the way it works. Anyway, Biden isn't up for reelection this year and is implementing this action through the executive branch, so control of Congress doesn't matter so much as to whether this policy is implemented or not.

ipaddr 4y ago
It's not as if many people have $10k-$20k sitting around they could put toward a student loan but have decided not to because of the announced policy. That is exactly what is happening. Sitting around could be defined as parents with $10,000 ready to help but deciding to let general tax payers pay up.
- ModernMech 4y ago
  If that were the case, there wouldn't be such a clamoring for debt relief. Fact is that student loan calculations already take into account the assets of parents. Schools routinely factor in the help they could give into the total cost, and offer a package of grants and loans to make up the difference. If parents are withholding support it likely means the student can't meet tuition with their aid package.

SnooSux 4y ago

I'm not disagreeing with any of your points, the 10k forgiveness policy is strictly a way to appeal to young voters. But you clearly didn't read the article. The article is about changes to the income-based repayment program, which was a big change that was part of the same bill. And frankly it doesn't get enough attention for how much of a long-term impact that it'll have on future borrowers, as opposed to the (tentatively) one-time forgiveness that affects mostly college graduates.

jgwil2 4y ago
Small nitpick: this is all executive action, not a bill or law. That means that it can be undone as soon as a new president takes office.
- caseysoftware 4y ago
  That's not a "small nitpick" but a huge glaring gap in this entire process. Not only can it be undone but it can be re-done or changed in any way imaginable short of a court stepping in and saying "no, you don't have the authority to do that" which is unlikely. We should get VERY nervous when POTUS enacts sweeping changes to "rewrite" laws without actually changing the law.
  - deleted 4y ago
    [deleted]

Eddy_Viscosity2 4y ago

Bring back the ability to declare bankruptcy for student loans and then market can better price risk. The only stipulation I would think might be good is a waiting period of say 10 or 15 years. This would to prevent say a new dentist or lawyer student from immediately declaring bankruptcy after graduation. By 10-15years on, if the person can't afford student loan payments, then bankruptcy should be on the table.

chrsig 4y ago
I fully agree with this. I'd add fixing interest on it. Variable interest rates just shouldn't exist.
troyvit 4y ago
Why should a college education take 10-15 years to pay off though?
- Eddy_Viscosity2 4y ago
  It wouldn't if you get a good paying job. But sometimes the degree doesn't pay out that way and people are left struggling to pay rent, let alone debt.
- skellington 4y ago
  Sure. Why should anything cost anything? Why should anyone have to subsidize people getting useless degrees at expensive colleges? Why can't you go to CCs and then state schools for much less? For most people, the modern college experience is just extended high school with almost zero educational value. Most people are more suited to trade schools. The poor kids already have incredible access to scholarships. It's all just "I want it" thinking.
  - Turing_Machine 4y ago
    You'd probably be surprised at how many of the student loans in default came from trade schools. I know the narrative is that all the people in student loan trouble majored in Bulgarian folk singing or whatever, but that's not anything like an accurate picture. The largest outright student loan cancellation in recent years was for former students of ITT Tech, which was a trade school.

hashmap 4y ago

This is bucket-crab talk. Not getting a reward is not the same as getting penalized; those who paid everything off have an unchanged situation. You might say the action doesn't go far enough and should lift up more people, and there is an argument for that. This, however, just smacks of "the train ran over me, so it's disrespectful if it doesnt also run over everyone else."

Ekaros 4y ago
Money does not magically appear from nowhere...
- hashmap 4y ago
  It is debt that does disappear if it is forgiven.
  - Ekaros 4y ago
    Debt is money...
    - hashmap 4y ago
      That disappears when forgiven, exactly.
      - s1artibartfast 4y ago
        If you loan me 10k, and then later forgive the loan, you are still 10k in the hole. I spent the 10k on goods and services, and you have 10k less that you can spend. Alternatively, can I borrow $10k from you?
s1artibartfast 4y ago
It isn't crab bucket mentality if you have to pay to lift others up.
- 4y ago

falcolas 4y ago

> Those who sacrificed and paid off their student debt receive no reward "I suffered, so everyone else should suffer the same way I did!" Seriously, this is such a self centered and short sighted point of view; it's the "back in my day people worked hard and gave their loyalty to their company" mantra of the previous generation being recycled. It's not a reward, it's a relief for predatory student loans applied to people at a time where society yelled "get a college degree or you'll never get a good job" into their ears day after day. If your knee jerk reaction is to feel sorry for yourself, or mad at them, perhaps you should take a step back and instead be happy for them, that they are not being shoved through the same pain you were (a pain which is is being amplified by the rise in the cost of living and stagnated wages). We should be lifting people up; not saying "grab your bootstraps and pull."

viggity 4y ago
It's not "I suffered". It is "I sacrificed"
- falcolas 4y ago
  Your $10,000 sacrifice also probably paid off more of the student loan than the $10,000 subsidy did. Education costs have risen. 33% on average over the last 10 years. 100% in the last 20. And that is accounting for inflation.
  - maerF0x0 4y ago
    People are discussing same graduation year, same school, same loan scenarios here. It's more about someone who forgoes something so that they pay off the loan, vs someone who does not forgo said thing, but ends up getting both (the loan and the thing). Eg: imagine one has an extra $1000 today and 10k of student loan. Could make 10 fun choices at $1000 each or I could pay off my student loan. If I choose to take the fun, I get both the fun and the load paid off. If I do the former, I do not get the fun. It actually becomes more exacerbated if someone did something with a net profit such as putting $10k down on a house for example. Now they have the equity in the asset _and_ the debt forgiveness. Whereas the person who paid off the loan themselves does not have the equity.

_-david-_ 4y ago

You are missing the worst part. There is no policy to actually fix the problem. Just paying off some debt now won't stop the next generation from taking out the same loans.

s1artibartfast 4y ago
The worst part is the link states that the new policy is to always do this in the future. Eg, no loan repayment for music majors and full repayment for engineers.

brightball 4y ago

The fact that the debate has remained on this topic is exactly the political division desired. It’s correct that the relief will do nothing to solve the overall problem. It’s also correct that it’s an unabashed vote buying scam that probably shouldn’t even be legal. But it’s also correct that the student loan structure is truly predatory. This entire conversation needs to shift from paid relief to “0% interest student loans” or fixed interest (borrow 100k and you will pay back 130k) and/or a pre-income tax option to pay back loans faster akin to a 401k. The way that interest builds on deferrals for these unforgivable loans is truly nuts based on the people I’ve talked to. Unless there’s a permanent way to do that, it’s all political theater.

labcomputer 4y ago
I'm not sure 0% interest really helps when (prospective) students still have the ability to borrow an unlimited amount of dollars. The current crisis is caused by colleges raising tuition to maximum amount that students are able to pay, which is essentially only limited by how much they are allowed borrow. What I would like to see is: 1. Federal student loans capped at $XX,000 per semester, disbursed directly to school. 2. If the school accepts federal loans for any student, then tuition and fees are capped for all students at $YY,000 per semester (where YY is a small multiplier on XX, maybe 1.25). 3. Interest capped at a "reasonable" amount. This might mean simple (non-compounding) interest, or non-accrual of interest while loans are deferred, or something else. 4. Private loans should be dischargeable in bankruptcy after 10 to 15 years.
- brightball 4y ago
  Fair points all around.

fallingknife 4y ago

And even if I supported the debt forgiveness, I would still think it's crazy that the president can just unilaterally spend $500 billion like that without any checks and balances.

rr888 4y ago
Esp when inflation is a problem. What should we do? Howabout hand out half a trillion.

godelski 4y ago

Don't forget that you also don't get forgiveness if you took out private loans instead of federal loans. This topic seems to be missed a lot.